How to Fix Unreasonable Merger Regulation

The 1914 Clayton Act prohibited any acquisition whose effect may be to “substantially” lessen competition. International Shoe defined § 7’s word “substantially” by saying that an acquisition’s effect is “substantial” only if it “will injuriously affect the public.” This paper shows that Standard Stations agreed: International Shoe’s definition of the Act’s word “substantially” was the only definition that Standard Stations offered. Although Standard Stations found that Congress had “authoritatively determined” that § 3 was exceptional, it never disputed International Shoe’s definition, which remained the well-known meaning of § 7’s word “substantially” when Congress reenacted § 7 in 1950. Since the context of Congress’ action is consistent with International Shoe’s definition, Congress was “presumed” to have adopted it, producing a better policy than what has been proposed since later Courts misread that history.